London close: Stocks reverse losses to finish above the line

London stocks managed a positive finish on Tuesday, reversing earlier losses even as worries about a global slowdown continued to weigh on investors’ minds.

The FTSE 100 ended the session up 0.18% at 7,209.86, and the FTSE 250 was 0.1% firmer at 18,854.96.

Sterling was mixed, meanwhile, last trading up 0.08% on the dollar at $1.1901, while it weakened 0.16% against the euro to €1.1825.

“It’s been another challenging day for markets in Europe with concerns over a global economic slowdown once again driving sentiment, which in turn appears to be driving a move into bonds, pushing yields lower,” said CMC Markets chief market analyst Michael Hewson.

“Despite these concerns, after an initially weak start to the day, we’ve spent the afternoon session pulling off the lows, with the DAX, CAC 40 and FTSE 100 all looking to close the day in positive territory.”

In economic news, the latest BRC-KPMG Retail Sales Monitor showed that retail sales fell in June, as surging inflation and the cost-of-living crisis caused shoppers to cut spending.

Total sales fell 1.0% last month, compared to an increase of 10.4% in June 2021.

On a like-for-like basis, UK retail sales were down 1.3% on June 2021, when they had jumped 6.7%.

In the three months to June, food sales increased 2.2% on a total basis or by 1.6% on an underlying basis.

But non-food-sales slid 3.3% and 4.2% on a total and like-for-like basis.

Total retail sales have now declined for three months in a row for the first time since the start of the pandemic in 2020, although the falls then were considerably large.

On the continent, German investor expectations slid in July amid worries about energy supply, according to a survey from the ZEW Center for European Economic Research in Mannheim.

The headline ZEW investor expectations index slumped to -53.8 from -28.0 in June, coming in well below expectations for a reading of -38.3.

Meanwhile, the current situation index declined to -45.8 in July from -27.6 the month before.

“The current major concerns about the energy supply in Germany, the ECB’s announced interest rate hike and further pandemic-related restrictions in China have led to a considerable deterioration in the economic outlook,” said ZEW president, professor Achim Wambach.

“The experts assess the current economic situation significantly more negatively than in the previous month and have further lowered their already unfavourable forecast for the next six months.”

Across the pond, a closely-followed gauge of small businesses' optimism in the US slid its lowest level since January 2013 in June, dragged lower by a fall in expectations for short-term business conditions and sales.

The National Federation of Independent Businesses' Small Business Optimism Index fell to 89.5, from a reading of 93.1 for May and well below consensus expectations for 93.0.

“Declines in the net percent expecting better business conditions have always preceded downturns in economic activity," said NFIB chief economist Bill Dunkelberg.

“At a net minus 61%, the lowest in 48 years, it is strongly indicating bad times for the economy to come.”

On London’s equity markets, miners were mixed after starting the day in the red, with Anglo American up 0.22%, while Rio Tinto Group lost 0.65% and Antofagasta was 0.42% lower.

British Land was down 1.79%, Hammerson slid 4.04% and Land Securities was dented 1.87% after rating downgrades at RBC Capital Markets.

“A combination of a relatively high level of variable revenues, high financial gearing, complicated ownership structures for its properties and its potential shift in business mix to mixed-use urban development amplifies the uncertainty over Hammerson’s future level of earnings in our view, risking deeply discounted share price multiples for a period of time,” RBC said.

Luxury car maker Aston Martin Lagonda tumbled 7.2% after Oddo slashed its price target on the neutral-rated shares to 420p from 1,000p.

Building materials distributor Grafton Group was 0.9% weaker, despite reporting a jump in first-half revenue and backing its full-year operating profit expectations.

On the upside, Centrica added 1.38% and SSE rose 1.78% after the government said on Monday that it would not be extending the windfall tax to electricity producers.

United Utilities Group was in the black by 0.77%, after agreeing to sell its portfolio of renewable energy assets in a £100m deal.

Online trading platform Plus500 rallied 1.22% after it said that revenue and profit for the current year were set to be ahead of market expectations following a solid performance in the first half.

Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk and Alexander Bueso.

Market Movers

FTSE 100 (UKX) 7,209.86 0.18%
FTSE 250 (MCX) 18,854.96 0.10%
techMARK (TASX) 4,327.27 -0.29%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 110.42p 6.50%
Coca-Cola HBC AG (CDI) (CCH) 1,928.00p 3.60%
Melrose Industries (MRO) 159.90p 3.19%
Intermediate Capital Group (ICP) 1,379.50p 2.99%
St James's Place (STJ) 1,173.00p 2.50%
Rolls-Royce Holdings (RR.) 88.78p 2.35%
M&G (MNG) 197.00p 2.33%
Abrdn (ABDN) 162.30p 2.27%
Kingfisher (KGF) 252.60p 2.14%
3i Group (III) 1,177.00p 2.13%

FTSE 100 - Fallers

Dechra Pharmaceuticals (DPH) 3,520.00p -3.14%
Aveva Group (AVV) 2,297.00p -2.54%
BP (BP.) 377.05p -1.96%
Land Securities Group (LAND) 662.40p -1.87%
British Land Company (BLND) 454.10p -1.79%
Shell (SHEL) 1,998.00p -1.60%
Endeavour Mining (EDV) 1,629.00p -1.57%
GSK (GSK) 1,742.60p -1.48%
Scottish Mortgage Inv Trust (SMT) 770.00p -0.98%
Glencore (GLEN) 422.05p -0.97%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 1,872.50p 4.58%
Carnival (CCL) 667.00p 4.09%
easyJet (EZJ) 369.40p 2.93%
IntegraFin Holding (IHP) 238.80p 2.84%
4Imprint Group (FOUR) 2,460.00p 2.71%
Inchcape (INCH) 732.00p 2.59%
Auction Technology Group (ATG) 914.00p 2.35%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 481.00p 2.34%
Man Group (EMG) 256.10p 2.28%
Molten Ventures (GROW) 400.40p 2.19%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 435.10p -7.20%
Chrysalis Investments Limited NPV (CHRY) 92.20p -4.16%
Petrofac Ltd. (PFC) 104.50p -4.05%
Hammerson (HMSO) 19.26p -4.04%
Genus (GNS) 2,426.00p -4.03%
Capricorn Energy (CNE) 215.00p -3.15%
Indivior (INDV) 300.60p -2.97%
HGCapital Trust (HGT) 325.00p -2.69%
Great Portland Estates (GPE) 579.50p -2.61%
Diversified Energy Company (DEC) 109.10p -2.50%